Qantas Airline, PESTEL Analysis

This report analyses the external factors that are likely to influence the future growth of the airline's industry with a focus on opportunities and threats likely to affect Qantas airline.

Running head: QANTAS AIRLINE, PESTEL ANALYSIS 1
Qantas Airline, PESTEL Analysis
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QANTAS AIRLINE, PESTEL ANALYSIS 2
Introduction
Qantas airline is the largest airline in Australia by fleet size and among the oldest airlines in the
world. It was founded in 1920 focusing on local flights but then expanded its operations to
international flights in 1935. It has its headquarters in Sydney and controls more than half of the
market in Australia. It also owns a hundred percent shareholding in Jester airways and has
invested in several other Jester branded airlines ("About Qantas | Qantas", 2018). This report
analyses the external factors that are likely to influence the future growth of the airline's industry
with a focus on opportunities and threats likely to affect Qantas airline.
Ecological factors
In recent years there have been several concerns due to increased global warming as a result of
emission of harmful gasses into the atmosphere. Environmental authorities have been established
to enforce strict regulations on environmental protection and take disciplinary actions on
companies that violate these laws. The most immediate impact caused by airlines in the
environment is noise pollution. The International Civil Aviation Organization was established to
establish and implement noise standard for airlines. There is also a major concern for air
pollution caused by airport operations and aircraft at ground level. They emit nitrogen dioxide, a
harmful pollutant that makes life around airports unbearable (Dodd, Orlitzky & Nelson, 2018).
These factors have an adverse effect on the future growth of the airline industry thus pose a
threat to Qantas airline as it may be required to use noise efficient and more environmentally
friendly engines for aircraft.

QANTAS AIRLINE, PESTEL ANALYSIS 3
Economic factors
Demand in the aviation industry is highly sensitive to economic factors such as inflation,
personal income, and the general economic climate. Economic recession periods negatively
influence the operations of airlines and make it extremely difficult for them to generate profits.
Increase in fuel prices and labor demands by employees are the major causes of financial distress
among airlines. Factors such as inflation and high interest rates could also force the airlines to
increase their prices which will lead to low demand. On the other hand, economic boom periods
are a major opportunity for airlines to reap high amounts of profit due to an increase in premium
traveling (Johnson, 2009). Qantas airline could make use of this opportunity by automating its
operations and upgrading technology to ensure that it remains in business during economic
recession periods. It could also find ways to cut down on costs so as to keep its prices as low as
possible and affordable to the consumer.
Technological factors
Technological factors are experienced on a daily basis and this is no different for the aviation
industry which has been experiencing heavy use of technology globally in recent years. Most
airlines now use online and social media platforms for advertising so as to reach as many clients
as possible. They also have websites and mobile applications where passengers can book and
check flight services instead of queuing physically for manual booking (Collett, 2012).
Technology has also made it possible to create faster and more efficient aircraft. Passengers have
also been greatly empowered by increasing connectivity on flights so that they can stay up to
date with current trends and they can also have a wide range of entertainment sources to choose
from. All these factors provide a great opportunity for airlines as they will be able to make their
operations more effective and efficient thus increase their profitability.

QANTAS AIRLINE, PESTEL ANALYSIS 4
Conclusion
Ultimately, the future growth of the airline industry is at stake with threats posed by ecological
concerns, strict rules and regulations and the possibility of economic depressions. In addition,
recent terrorist attacks and crashes have negatively impacted the profitability of airlines.
However, airlines could take advantage of the opportunities presented by technological
advancements.
Bibliography
About Qantas | Qantas. (2018). Retrieved from https://www.qantas.com/travel/airlines/about-
qantas/global/en
Collett, H. (2012). Flurry of activity sparks dismal aviation industry. Hospital Aviation, 6(3), 10-
15. doi: 10.1016/s0740-8315(87)80032-3
Dodd, T., Orlitzky, M., & Nelson, T. (2018). What stalls a renewable energy industry? Industry
outlook of the aviation biofuels industry in Australia, Germany, and the USA. Energy
Policy, 123, 92-103. doi: 10.1016/j.enpol.2018.08.048
Johnson, J. (2009). Case Study Methodology in the Aviation Industry. Journal Of
Aviation/Aerospace Education & Research. doi: 10.15394/jaaer.2009.1427